Equinix, Inc. (NASDAQ:EQIX) Q4 2022 Earnings Call Transcript

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And our conversion rates continue to sort of make us feel confident in that. And then the second one, relative to the power pass-through, we feel very good. We’ve got — we’ve communicated that out to customers. We’ve had a lot of inquiries. Most of those inquiries are simply about explaining and providing them additional information on the charges. And so to this point, we feel very confident that we’re — continue to feel very confident we’re going to get full recovery of that. And we’ll continue to update you as we learn more. But right now, all systems go.

Operator: Our next question will come from Jon Atkin with RBC Capital Markets. Your line is open.

Jon Atkin: So maybe looking a little bit at the revenue growth guidance, if you could unpack — you talked about the energy price increases. But apart from that, cabinet growth versus cross-connect growth and various flavors of digital services. Can you talk a little bit about what you’re expecting for 2023?

Charles Meyers: Sure. Yes. Again, we’re very excited. As evident in the guide, we continue to feel very optimistic about the top line of the business. Obviously, it’s a bit elevated with the power price pass-through. But even on an adjusted basis, excluding that 9% to 10%, which is above the long-term guide that we had provided at the Analyst Day. So, I think it reflects the overall strength in the business. And we’re seeing really across-the-board strength. I think in colo and interconnection, in digital services and really across the regions. And we’re seeing a combination of solid volume and very strong pricing. And so, I definitely think pricing is going to continue to contribute, and that is separate and apart from the power price increase.

Even if you take that 9% to 10%, I think us increasing list pricing, which I think in sort of an inflationary environment, we have to demonstrate that we can do that. And I think we’re having good success with that. So, I think the colo business remains strong, unit volumes on colo interconnection growing at 13%. Again, we saw slightly softer unit adds there, but I think we feel like that will probably normalize through the course of the year. And then digital services, we came off a really strong quarter. 2022 was really, I think, the front end of an inflection point of really, people saying, this is a great way for us to think about how to really use the power of the interconnected edge at Equinix in new ways. And so, I think we’re going to see great strength there.

The Americas business performed — ’22 is just an amazing year for the Americas business. I think EMEA really demonstrated some strength coming off the back end of the interconnection price increases and continuing to really evolve that portfolio to the retail suite. And then Asia is our fastest-growing region at 17%. So again, I feel very good that we’ve got pretty comprehensive strength in volume and in price across products and across geographies.

Jon Atkin: So just by way of follow-up and what you’re expecting in terms of customer decision cycle this year, book-to-bill intervals in your core business, it sounds like no change. I just wanted to kind of verify that. And then turning to xScale briefly, if you could maybe comment on pricing in the wholesale segment, and how is that keeping pace with higher build costs and higher financing costs?

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